Government initiatives to help boost Dubai’s real estate market
DUBAI, February 10, 2020
Dubai government's major initiatives, including the formation of a new real estate committee to regulate and control future supply, are expected to support the emirate’s residential sector, according to new data released by global real estate consultancy firm CBRE.
The report also reveals that there is a continued push for residential developments to be completed before the start of Expo 2020, which is set to welcome more than 25 million visitors over a six-month period from October 2020 to April 2021.
In addition, developers are introducing a number of schemes to further stimulate the market. These include rent-to-own initiatives, waived completion fees and new residential “co-living” schemes.
Figures from CBRE demonstrate that existing supply at the end of H2 2019 stood at 608,500 units in the emirate, with an additional 127,000 units expected to be delivered by 2023.
The sales price of an apartment in Dubai at the end of H2 2019 was between Dh480 and 1,950 per sq ft,, whilst a villa could be purchased for Dh640 – 2300 per sq ft, stated CBRE in its report.
The positive effects of Expo 2020 on the real estate market are expected to be strongly felt within the hospitality sector, it added.
The top real estate consultancy said occupancy levels were anticipated to increase in line with a growth in visitor numbers as a result of Expo 2020.
To further stimulate the tourism industry, the government has decreased municipality fees and licensing fees which has had an immediate uplifting effect on hotel occupancy, said CBRE in its report.
The sector experienced the entry of several lifestyle and boutique hotel operators into the market in H2 2019, whilst increased competition further drove refurbishment, rebranding and repositioning amongst ageing properties, it added.
Simon Townsend, head of strategic advisory at CBRE (Mena region and Turkey) pointed out that the year of Expo represents yet another important milestone for Dubai’s real estate sector.
"There have been concerns around supply in recent years, however a number of promising initiatives such as the new Government real estate committee will certainly boost the market sentiment, across all major segments, by regulating supply and promoting collaboration between all key stakeholders in the industry," stated Townsend.
According to him, performance remains soft in sectors such as retail, but the innovative spirit of Government, developers and landlords will play a key role in driving growth.
Landlords are also committed to diversifying existing stock to provide new entertainment destinations to the emirate’s residents. As Expo 2020 fast approaches, it will be important for all stakeholders to ensure that legacy planning remains a firm prioritym, he stated.
"This will ensure that the impressive projects commissioned to support the event continue to deliver in the months and years after the end of Expo. Dubai has made remarkable progress over the past few years to become a world-class tourism destination and an economic powerhouse and the market is expected to continue to react positively to the great efforts of the Dubai Government to further bolster the emirate’s reputation," he added.-TradeArabia News Service